FranchiseVerdict
Gracie Barra logo
A51/100FDD 2025

Gracie Barra — Litigation & Risk

Health & Fitness · FDD Items 3, 4 & 5

Back to overview

Moderate — Review

1 case disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
1
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
51 / 100
FranchiseVerdict composite
Rating
STRONG
STRONG / MODERATE / CAUTION / AVOID

7(a) FOIA data · FY2020–present

SBA Loan Performance

Aggregated from public SBA 7(a) loan disclosures. Default rate is the share of loans that were charged off or settled for less than the full balance.

Total 7(a) loans
16
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$7.9M
Avg loan size
$491K
Participating lenders
12

FDD Items 5, 6 & 17 — what you give up

Contract Risk Indicators

Mandatory arbitration
Required
Disputes resolved outside court — limits your legal options
Jury trial waiver
Waived
You give up the right to a jury trial
Franchisor can compete
Yes
Franchisor can open competing locations in or near your territory
Right of first refusal
Yes
Franchisor can match any purchase offer when you try to sell
Governing law
California
State whose law governs disputes — relevant if you're not based there

What drove the 51/100 rating

Risk Score Breakdown

  1. 01HIGHActive litigation involving vicarious liability for sexual assault at franchised location creates significant legal and reputational risk
  2. 02MEDNo Item 19 financial disclosure (Avg Revenue and Net Income not disclosed) prevents accurate ROI analysis on $76k-$233.5k investment
  3. 03MINORModest unit growth of 9.0% YoY is below industry standards for martial arts/fitness franchises, suggesting market saturation or underperformance
  4. 04MINORLow royalty structure ($600-$900/month) indicates weak franchisor support infrastructure relative to franchisee investment size
  5. 05MINOR5-year term is shorter than industry standard (typically 10 years), creating renewal uncertainty and unstable long-term planning

Severity inferred from FDD text — not a regulatory or legal classification

Litigation data from FDD Items 3, 4, and 5. SBA data from public 7(a) FOIA records (FY2020–present). Not legal advice — consult a franchise attorney before signing any franchise agreement.